AWS Gains Approval for Second Data Center in Santiago Expansion

Amazon Web Services (AWS) has received regulatory approval to construct a second data center in Santiago, Chile, this time in the northern suburb of Huechuraba. This development follows AWS’s successful bid to establish its inaugural Chilean data center also in Santiago. AWS will invest approximately $205 million into the Huechuraba project, matching the financial commitment of its first facility.

Details of the Huechuraba Data Center

Infrastructure and Facilities

One of the most significant aspects of AWS’s upcoming Huechuraba data center is the construction of two buildings spread over a 10.9-hectare expanse. The environmental review agency (SEA) documents reveal that one building is slated to offer 8,000 square meters of space dedicated to data center operations, while the other will have 10,400 square meters spread over two floors. The site will also include offices, advanced cooling systems with low water consumption, fire control systems, and 23 emergency electrical generators.

The project will unfold in several stages, with the initial phase set to conclude by February 2026. This phase involves the construction of the first half of the first building, as well as infrastructure and exterior campus development. Subsequent stages will focus on completing the initial building and constructing the second one. While specific capacity metrics for the data center have not been disclosed publicly, the scale of the investment and the advanced infrastructure signify a considerable enhancement to AWS’s capabilities in the region.

Timeline and Investment

AWS’s effort to build this second data center is a clear indication of its commitment to enhancing its presence in Latin America. The fact that AWS is willing to allocate another $205 million for the Huechuraba facility reflects both confidence in the region’s market potential and a strategic intent to establish a robust footprint. According to SEA’s documents, the project’s phased timeline ensures that AWS can gradually increase its capacity and resilience.

The phased approach provides not only operational flexibility but also a financial cushion, helping AWS manage potential risks and environmental concerns more effectively. By adopting this gradual development strategy, AWS is setting a precedent for other tech giants looking to expand their data center operations in regions fraught with regulatory and environmental challenges.

Broader Context and Challenges

Regulatory Hurdles

AWS’s journey in Chile has not been without obstacles. A third data center initiative planned for Santiago’s Puente Alto commune faced a setback when SEA rejected the proposal in 2023. However, AWS’s enduring interest in Chile dates back to 2017, culminating in the creation of a Local Zone in Santiago earlier in 2023. Despite these regulatory challenges, AWS remains undeterred.

The strategic focus on Santiago underscores AWS’s strong commitment to expanding its presence in Latin America. Santiago is a bustling hub for numerous tech operators, including Equinix, GTD, EdgeConneX, Google, Scala, Aligned, and Databyte. The tech industry’s focus on Santiago highlights the city’s evolving role as a central player in the region’s digital transformation. Despite the regulatory hurdles, AWS’s persistence showcases its long-term vision and commitment to the region.

Santiago as a Data Center Hub

Santiago’s prominence as a data center hub has not been without challenges. For instance, Google’s attempt to build a second data center in Cerrillos, Santiago, a $200 million project, was blocked in February 2024 due to concerns over water usage. According to a CBRE report, rental rates in Santiago have surged to $500 per kW per month, reflecting the growing demand and operational costs associated with data center facilities.

These financial and regulatory complexities amplify the significance of AWS’s continued commitment to the region. The competitive landscape in Santiago, marked by high operational costs and stringent regulatory requirements, necessitates a thoughtful and calculated approach to expansion. AWS’s continued investment in the face of these challenges not only positions the company as a resilient industry leader but also highlights the growing importance of Santiago as a critical nexus for global tech enterprises.

AWS’s Strategic Initiatives

Future Prospects

AWS’s continued expansion in Santiago symbolizes the larger trend of data center investments in the region, amidst rising operational costs and regulatory intricacies. The focus on low water consumption cooling systems and other advanced technologies indicates AWS’s commitment to sustainable development, an increasingly crucial factor in data center operations globally. The company’s ongoing initiatives reflect a deep understanding of the region’s potential and an adaptive strategy designed to navigate its complexities effectively.

Despite regulatory obstacles and economic pressures, AWS’s unwavering commitment to expanding its footprint in Chile underscores the region’s growing importance as a data center hub. This consistent investment not only enhances AWS’s competitive edge but also sets a benchmark for other global tech companies eyeing Latin America. AWS’s strategic foresight in leveraging both technological advancements and sustainable practices positions it favorably in a rapidly evolving market landscape.

Conclusion

Amazon Web Services (AWS) has gained regulatory approval to establish a second data center in Santiago, Chile. This new facility will be located in the northern suburb of Huechuraba. This expansion follows AWS’s pioneering efforts to set up its initial Chilean data center in Santiago, marking a significant milestone for the company in the region. The new Huechuraba project will require an investment of around $205 million, reflecting a similar financial commitment to AWS’s first venture in Santiago. This indicates AWS’s confident approach and continued dedication to expanding its data infrastructure in South America, allowing it to better serve its growing customer base. The strategic location of these facilities in Santiago underscores the increasing importance of Chile as a technological hub in the region. This expansion not only emphasizes AWS’s role in shaping the digital landscape of Latin America but also promises to bolster local economic growth through job creation and enhanced technological capabilities.

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